American Outdoor Brands Corporation

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Debney Out at AOBC/Smith & Wesson On Eve Of SHOT Show

January 16, 2020 by 1 Comment

James Debney, CEO and President of American Outdoor Brands, was dismissed by the Board of Directors today. He had been slated to be the CEO of the American Outdoor Brands sporting goods segment when the company splits later this year.

From The Guardian

From the news release:

American Outdoor Brands Corporation, today announced that its Board of Directors has named Mark P. Smith and Brian D. Murphy as co-Presidents and co-Chief Executive Officers of American Outdoor Brands Corp., effective immediately.   Smith was most recently President of the Manufacturing Services Division of the company, while Murphy was most recently President of the Outdoor Products & Accessories Division.  In their co-leadership roles, Smith and Murphy succeed James Debney, who has separated as President and Chief Executive Officer and as a Director of the company, following the determination by the Board of Directors that he engaged in conduct inconsistent with a non-financial company policy.

The “inconsistent” conduct was not specified in the release.

Mark Smith was already slated to head the new Smith & Wesson Brands, Inc. after the spin-off.

Brian Murphy is now going to become the CEO and President of American Outdoor Brands, Inc. after the company is split into a sporting goods segment and a firearms segment.

Coming just before SHOT Show starts in less than a week, this is an interesting development.

The new release goes on to quote the Chairman of the Board Barry Monheit as saying:

We appreciate James’ contributions toward the growth and development of our company and its infrastructure.  The Board believes the company is fortunate to have two highly capable and experienced leaders in Mark Smith and Brian Murphy.  Each has played a critical role in the development of our strategic plans, including our intention to establish each business as an independent, publicly traded company.  In addition, Mark and Brian have each demonstrated, through years of leadership and service, their extensive knowledge of and passion for our company, our customers, and our industries.  Their capabilities and objectives position them well to share the combined CEO role as the team completes the separation of our two businesses later in 2020.  The Board has every confidence that they will provide the vision and determination to lead each independent company and its highly respected brand portfolio toward a successful future.

The Wall Street Journal reports that the spokesperson for the company did not provide any details on why Debney was fired beyond what is contained in the news release. Their article also takes note that the firing occurred just days before the SHOT Show was to begin.

Debney earned $3.76 million in compensation for the last year. Most of that compensation was due to bonuses and stock awards on top of his $750,000 salary.

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More On S&W Changes

November 15, 2019 by

American Outdoor Brands Corporation held a shareholder update webcast on the plans to split the company. The webcast last for about 30 minutes if you want to listen to it. It can be found here.

I have embedded the slides for the presentation below. It shows which brands will go to Smith & Wesson and which brands will stay with American Outdoor Brands.

AOBC CEO James Debney acknowledged there had been significant changes in the political, financial, and insurance arenas over the past five years. Based on that, they decided it was in their best interest to separate into two distinct companies. It should be noted that the decision to make the split was in the works for many months. The timing of the announcement which the day after the Supreme Court’s denial of cert to Remington was merely coincidental.

AOBC Spin Off Deck Nov 2019 by jpr9954 on Scribd

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S&W To Become Free-Standing Company

November 13, 2019 by

American Outdoor Brands Corporation announced today that it planned to separate into two publicly traded companies. One company would be focused on firearms (Smith & Wesson) while the other company would be dedicated to outdoor products (American Outdoor Brands). The split would be finalized in the second half of 2020 according to the press release.

Bloomberg reports that the split is part of “an effort that may help it boost values that have flagged under pressure for gun reforms in the U.S.” “Gun reforms” is the euphemism that Bloomberg is using for gun control.

While something like this would have been in the works for months, I find it interesting that the announcement is being made the day after the Supreme Court denied cert to Remington. Bloomberg does make reference to this in their article as well as moves by retailers such as Dick’s and Walmart to limit what firearms and ammunition they sell.

The official rationale for the split is to let each segment concentrate on their separate markets.

The purpose of the spin-off is to enable the management team of each company to focus on its specific strategies, including (1) structuring its business to take advantage of growth opportunities in its specific markets; (2) tailoring its business operation and financial model to its specific long-term strategies; and, (3) aligning its external financial resources, such as stock, access to markets, credit, and insurance factors, with its particular type of business.

AOBC Chair Barry Monheit said, ” There have been significant changes in the political climate as well as the economic, investing, and insurance markets since we embarked upon what we believe have been our very successful diversification efforts.” It is obvious to me that Monheit is speaking about both national and state efforts to impose more restrictions on firearms ownership and possession.

The move by American Outdoor Brands is similar to that of Vista Outdoor. In that case, Vista Outdoor was the firearms-centric portion of the ATK split. While initially the stronger part of the split company, the pull back in firearm and ammunition sales hit it hard. They finally sold off the Savage Arms portion of the business this summer to concentrate on ammunition and the other outdoor portions of their business.

James Debney, the current CEO, will become the CEO of American Outdoor Brands. Mark Smith will become CEO of Smith & Wesson. He is currently the president of the Manufacturing Services Division of AOBC.

The entire press release can be found here. It goes into much more detail on the lower leadership positions, finances, etc.

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A Pair Of Firearm-Related Product Recalls

September 19, 2017 by

Safety is paramount when dealing with firearms. If either of these recalls effect you, please stop using the product and follow the manufacturer’s instructions for returning the product for upgrade or replacement.

First, for the person who assembles their own AR15 comes this from American Outdoor Brand’s Battenfield Technologies subsidiary. It is the AR15 lower parts kit (Item #110114) sold prior to September 12, 2017 and marketed under the S&W M&P label. It only applies to the lower parts kit and not to factory assembled S&W M&P-15s. The hammer in the kit is missing a pin due to a packaging error.

Here is a picture of the hammer involved and the steps you need to take to remedy the issue.

Remedy/Action to be Taken
DO NOT ASSEMBLE A RIFLE USING THIS M&P15 COMPLETE LOWER PARTS KIT. IF YOU HAVE ALREADY DONE SO, STOP USING THE RIFLE IMMEDIATELY.
Any unintended discharge of a firearm has the potential to cause injury. We are asking all purchasers of the M&P AR-15 Rifle Lower Parts Kit Complete to refrain from assembling a rifle using the hammer from the kit. If you have already done so, immediately stop using the rifle until corrective action can be taken.
To facilitate this repair, please contact Battenfeld Technologies, Inc. at the number below to arrange for the return and replacement of the M&P AR-15 Rifle Lower Parts Kit Complete, or the hammer only from the kit.
When you return the hammer, we will replace it with a new part at no cost to you. Your hammer will be returned as quickly and efficiently as possible. Remember, while you are awaiting the replacement hammer, any rifle assembled with an M&P AR-15 Rifle Lower Parts Kit Complete should NOT be used. The lower receiver should be disassembled and the rifle should be stored unloaded and with the safety in the SAFE LOAD/UNLOAD position.
Please do NOT return firearms or receivers to Battenfeld Technologies, Inc. Firearms or receivers received by Battenfeld will be returned to sender WITHOUT remedial action. The M&P AR-15 Rifle Lower Parts Kit Complete with the replacement hammer will be identified as Item #1085634.
For hammer-only replacements, you should note a J pin as shown in the photo below. This J pin is confirmation that your hammer has been replaced.
Consumer Contact:
To arrange for the replacement of the hammer, email us at recall110114@btibrands.com or call us at (877) 416-5167. Your hammer will be returned as quickly and efficiently as possible.
IF YOU HAVE ANY QUESTIONS ABOUT THIS RECALL, PLEASE CONTACT BATTENFELD TECHNOLOGIES, INC. AT (877) 416-5167.

The second recall comes from SIG and involves a limited number of their SIG716, SIG516, and SIGM400 rifles which may have an improperly heat-treated hammer in the trigger assembly.

Newington, NH (September 15th, 2017) – SIG SAUER, Inc. has determined that a limited number of rifles in the SIG716 DMR®, SIG516® Carbon Fiber and SIGM400® Predator models were built with a two-stage SIG SAUER trigger that may have an improperly heat-treated hammer. Over time this could result in a trigger malfunction creating a significant safety hazard. SIG SAUER is issuing a mandatory recall to replace the hammer and trigger assembly in these specific rifles. This recall does not affect any military or law enforcement rifles or any SIG MCX®/SIG MPX® products.

SIG SAUER will correct any of the affected firearms at no cost to the customer.

To determine if a specific firearm is affected by the recall, go to https://www.sigsauer.com/support/safety-center/rifle-safety-warning/ and utilize the serial number identifier and visual inspection instructions.

If you are a customer who is affected by the recall, stop using the firearm immediately and follow the instructions on the website or call SIG SAUER Customer Service by dialing 603-610-3000, option #1. Have the rifle’s serial number available.

To reiterate on both recalls, if you own either of the products involved, stop using them now and contact the manufacturers involved.

UPDATE: In an absurd posting, the Bloomberg-financed, anti-gun “news service” (sic) The Trace criticizes SIG over their safety warning and recall. They contend that SIG is “keeping gun owners in the dark” by just saying it can cause a “trigger malfunction” due to the improper heat treatment of the hammer. The Trace wants SIG to go into chapter and verse over what a trigger malfunction might cause. They point to the safety warning (probably mandated by the Consumer Product Safety Commission) issued by Takata on their air bag recall.

I think the average firearm user recognizes that they are a) using a tool that can have deadly consequences if misused, b) that a trigger malfunction is not good, and c) you don’t mess around with trigger malfunctions.

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Finally Confirmed – S&W Buys Suppressor Maker Gemtech (Updated)

July 5, 2017 by 1 Comment

In what has to be considered the worst kept secret on the Interwebs, it was finally confirmed today that Smith & Wesson division of American Outdoor Brands Corp. is buying suppressor maker Gemtech (Gemini Technologies). The Firearm Blog announced it as breaking news on Sunday, July 2nd, and many people posted this to Facebook including myself.

Given that AOBC is a public company, SEC Regulation FD requires “companies to distribute material information in a manner reasonably designed to get that information out to the general public broadly and non-exclusively.” A purchase of this magnitude would certainly have been “material”. I kept looking for a news release on AOBC’s investor relations website as well as for a 8-K filing on the SEC’s website regarding this purchase. 8-K filings usually are simultaneous with new releases though a company has up to four business days to make the filing. I could not find anything official on the purchase of Gemtech.

While I assumed that there was indeed a transaction that was going to take place, not having official confirmation told me one of two things. First, that the transaction wasn’t a done deal yet and maybe there was a snag in the negotiations. Second, it could have meant – and I think this is what happened here – that someone, somewhere jumped the gun on the announcement and violated a non-disclosure agreement.

I think the timing is right for both companies involved. S&W competitors Ruger and SIG both now produce their own suppressor lines. So, too, does Remington with their AAC division. The purchase of Gemtech now allows S&W into the game at a significant level without having to start from scratch. It may also signify a vote of confidence on the part of AOBC and S&W that the Hearing Protection Act will pass as either a stand alone bill or as part of the SHARE Act.

According to Gemtech’s website, they have been in the suppressor business since 1976. While I don’t know how the ownership of Gemtech is structured, I’m guessing that what we are seeing here is a situation similar to that of Crimson Trace. The founder(s) have reached a point where they want to relax a bit and this gives them the opportunity to cash out while still maintaining a presence. Thus, the purchase of Gemtech by S&W becomes a win-win situation for all involved.

The official release is below and notes that the current CEO of Gemtech, Ron Martinez, will stay on as General Manager.

SPRINGFIELD, Mass., July 5, 2017 /PRNewswire/ — American Outdoor Brands Corporation (NASDAQ Global Select: AOBC), a leading manufacturer of firearms and a provider of quality accessory products for the shooting, hunting, and rugged outdoor enthusiast, today announced that its firearms business, Smith & Wesson Corp., has agreed to acquire substantially all of the assets of Gemini Technologies, Incorporated (“Gemtech”), a provider of high quality suppressors and accessories for the consumer, law enforcement, and military markets.

James Debney, President and CEO of American Outdoor Brands, said, “Gemtech is widely recognized for producing some of the finest rifle and pistol suppressors in the market. Gemtech’s strong product development capabilities, combined with our experience in brand management and our manufacturing expertise, will help us to efficiently develop both firearms and suppressors, minimizing our time to market for both product categories. We view this acquisition as opportunistic, allowing us to enter the suppressor category, which resonates strongly with our core firearm consumer, at a time when the market is particularly soft. These elements combine to make Gemtech an excellent fit with our long term strategy.”

The company intends to complete the acquisition of Gemtech utilizing cash on hand and expects the transaction to close this summer. Ron Martinez, President of Gemtech, will continue in his leadership role as General Manager, heading up the company’s strong team located in Eagle, Idaho.

UPDATE: On Monday I had written Liz Sharp, VP for Investor Relations at AOBC, inquiring why there was no release on the purchase of Gemtech and asked if the info had leaked prior to the official release. I got a response back last night after I had written this post. It seems that since AOBC didn’t buy Gemtech but just their assets it was not considered “material”.

Hello, John, and thank you for the inquiry. Yes, Smith & Wesson will purchase the assets of Gemtech in a transaction that we plan to close this summer. Since the transaction is an asset purchase and not deemed to be material, we announced the transaction internally to our employees prior to the holiday, and externally via a press release this morning. … We believe this is a great fit with our strategy. Please let me know if I can help further, and thanks again for the inquiry.

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Shareholders Vote To Change Name Of Smith & Wesson Holding Company

December 13, 2016 by 4 Comments

Smith & Wesson Holding Company (SWHC), the parent company of such brands as Smith & Wesson, Crimson Trace, and Battenfield Technologies, reported today that shareholders approved the requested corporate name change. Effective January 2017, the new holding company name will be American Outdoors Brand Corporation. The press release below reports that shareholders “overwhelmingly” supported the name change. The winning percentage was not released but I have a request in to their investor relations department for this information.

As one of the shareholders of record that voted “No” on this name change, I still think this is a mistake on the part of the company. While their product mix has been greatly broadened through acquisitions of companies such as Crimson Trace and Battenfield Technologies, I still think the value of an instantly recognizable name – Smith & Wesson – is invaluable. The firearm division will still retain the name “Smith & Wesson” and it is only the holding company that is changing its name.


From investor relations:

Holding Corporation Will Become American Outdoor Brands Corporation

SPRINGFIELD, Mass., Dec. 13, 2016 /PRNewswire/ — Smith & Wesson Holding Corporation (NASDAQ Global Select: SWHC), today announced that its stockholders have overwhelmingly approved a change to the holding company’s name from Smith & Wesson Holding Corporation to American Outdoor Brands Corporation. The name change does not impact Smith & Wesson Corp., the name of the company’s firearms division, which has legendary roots dating back to 1852 and will remain unchanged. The name change pertains only to the holding corporation that acquired Smith & Wesson in 2001 and now owns Smith & Wesson Corp., Battenfeld Technologies, Inc., and Crimson Trace Corporation, which represent the company’s firearms, manufacturing services, accessories, and electro-optics divisions.

James Debney, President and Chief Executive Officer of Smith & Wesson, said, “We are excited about the results of today’s stockholder vote. We believe that American Outdoor Brands Corporation is a name that truly represents our broad and growing array of brands and businesses in the shooting, hunting, and rugged outdoor enthusiast markets. Looking ahead, and operating as American Outdoor Brands Corporation, we intend to continue building upon our portfolio, focusing on brands and products that best meet the needs and lifestyle of our target consumers.”

The name change will be effective on or about January 1, 2017, at which time the company will adopt the common stock trading symbol “AOBC” for its NASDAQ stock exchange listing.